Amazon Poised to Torch the Tablet Market

Ask any tech-savvy hipster about the biggest, most influential companies in the business, and they'll quickly rattle off names like Apple, Google, and possibly Microsoft. But the quietest and stealthiest of the tech influencers is about to come roaring out of the gates this week. And if the name Amazon.com doesn't ignite feelings of excitement quite yet, just wait. It will.

On Tuesday, Amazon will launch two important new Kindle devices, the Kindle Touch and the Kindle Fire. The first is a direct follow-up to the now-classic Kindle eBook reader, which first launched in 2007. Since then, prices have come down dramatically, from $400 that year to under $100 now, and the design keeps getting nicer. But the basics have remained the same: a gray-scale E-Ink screen, superior text display, but not so great for graphics or complex layouts.

The Kindle Fire is far more interesting. Here, Amazon is finally offering a device that can keep the Apple iPad at bay. That's true even though the Fire, from a specs-sheet perspective, could hardly be considered directly competitive. But the Amazon Fire is a color tablet computer, just like the iPad. It offers access to tons of apps and content from a well-stocked online store and corresponding ecosystem, just like the iPad. And it costs just $200.

That's nothing like the iPad.

Apple's iPad has been credited for establishing a new product category, though it's not hard to imagine that these devices and more traditional PCs will simply evolve in lockstep until they've become different takes on the same concept, much like Macs and PCs are today. But iPads are expensive—very expensive. The line starts at $500 and goes all the way up to $830. That's Apple pricing, folks, and it's astonishing that no other company has been able to undercut Apple with a competitive device.

That's where Amazon comes in. According to most early reviews, the Fire doesn't compete head-to-head with the iPad. It doesn't offer a camera, microphone, Bluetooth, optional 3G wireless, or GPS, for example. Its 7" widescreen display is perhaps less ideal for traditional computing tasks than the iPad's bigger 4:3 10" display. And Amazon isn't interested in turning the Fire into a full-fledged computer, as Apple seems to be racing toward with iPad. The Fire, instead, is all about consuming content.

But the Kindle Fire provides most of what people are looking for in a tablet and it does so at a far lower price than the iPad. In fact, you could purchase three Kindle Fires for the same price as a single 32GB iPad. Three.

This commodity pricing is exactly the strategy that Microsoft and its partners used to undercut Apple in the PC business decades ago, and many expect Amazon to succeed with tablets for similar reasons. But the key special ingredient here is the Amazon ecosystem, and this is the reason that other players, including the many companies that sell Android-based tablets, have failed. Amazon has the same kind of online store, with the same voluminous collection of content, that Apple has. It is one of the very few companies that can go toe-to-toe with Apple in this way. And that fact, combined with a product price that isn't just lower but crazy-lower, puts Amazon over the top.

I've used and reviewed virtually every Kindle that's come down the pike, and my experience with past devices suggests that this first Kindle Fire will be lacking in some ways. It will be bulky, slow, and inconsistent. It will be less than ideal. But the Kindle Fire, like that first-gen Kindle from 2007, includes the spark of something that will be long-lasting and market-changing. And unlike that device from four years ago, this time Amazon got the price right too.

So I'll be reviewing the Kindle Fire (and the associated Kindle Touch, which is based on the old E-Ink display) as soon as possible. But it's already clear that this device is a disrupter and that, hyperbole aside, Amazon is about to remake the tablet market. I'm curious to see how things look a year from now.

Discuss this Article 15

I'm also sure that Paul's review of the Kindle Fire will be ridiculously positive on Amazon and anti iPad, contradicting everything every other reviewer has written. Then simply fob the negative reviews off as Apple fanboism.
He has already made his mind up before even using the thing:
"And I'll be reviewing the Kindle Fire. I wish Amazon's iPad Killer came in more versions, ironically--I'd like a choice of storage sizes--but even in this first release it's very clear that the company has out-maneuvered Apple. This is a very high quality device that costs just $200, a price that makes the iPad look ridiculous by comparison. Yes, the Fire is a game changer for the tablet market just as surely as the iPad invented that market. And yes, Apple should be very worried: The Kindle Fire is that good."
http://www.windowsitpro.com/article/mobile-computing-devices/amazon-kindle-late-2011-lineup-141322

@yoshi - I understand what you are saying, but to the average consumer the price of the iPad is a bit high. It is not an impulse buy nor is it something that will replace a desktop/laptop computer...yet.
This is anecdotal, but In the last 2 weeks, I have been asked my opinion on tablet purchases from 4 different people. My response was the same to all of them, "What are you planning to use it for?" Usually, they would say web browsing, reading books, playing games(Angry Birds was specifically mentioned by 3 of the 4 people - scary!). My next question would be, "Do you have an iPhone or iPod and a lot of music that you have purchased from iTunes?" If the answer was yes, I would always suggest the iPad. If not, I would ask a few more questions about usage, kids, eyesight, etc. 3 of the 4 bought Android tablets - solely because of the price. The other person has not yet made a choice, but is heavily leaning towards the iPad....but again, the price is why he hasn't made his mind up yet.

It seems that evil Apple-lover Pogue doesn't love the Kindle Fire. I'm sure it's all an anti-Microsoft conspiracy....even though the Kindle has nothing at all to do with Microsoft...
http://www.nytimes.com/2011/11/14/technology/personaltech/the-fire-aside-amazons-lower-priced-kindles-also-shine.html?pagewanted=1&_r=1
"Most problematic, though, the Fire does not have anything like the polish or speed of an iPad. You feel that $200 price tag with every swipe of your finger. Animations are sluggish and jerky even the page turns that youd think would be the pride of the Kindle team. Taps sometimes dont register. There are no progress or wait indicators, so you frequently dont know if the machine has even registered your touch commands. The momentum of the animations hasnt been calculated right, so the whole thing feels ornery."
Or as the Wa. Post sums it up
"If you want the one-sentence of the Kindle Fire, here it is: Great for the price, but its no iPad."
It will be interesting to see how Paul reviews it. I've not seen one of these devices, but based on the reviewer complaints, I think Paul would savage this device.....if it were made by Apple. Let's see how honest he'll be since it isn't...

chuckb84
The internet is a relatively new service, run almost exclusively by private companies, and is not yet seen as, or legislated as, an essential service. Utilities, thankfully, are. Much as consumer products have outgrown, and in some cases, abused the patent and court systems, the internet has bypassed the legislative process. It should be seen as an essential service and controlled and regulated by legislation as such.

tayme, forkleboy,
Yah, we're all in agreement about the cloud. Lots of potential and lots of serious issues about reliability. Two points:
1. Reliability is hard because it has multiple points of failure. Apple had serious issues with the iOS 5 update because it overloaded some ISPs. Apple servers might have had plenty of capacity, but if the net fails elsewhere you're still SOL. Furthermore, the reliability can -never- be better than the worst reliability of the electrical grid between you and the cloud service you're accessing. This alone probably guarantees reliability not much above 99%. That may sound sufficient, but it's 3 days/year downtime! Some redundancy and local backup systems are going to be needed for a long, long time.
2. The things we rely on as utilities: electricity, gas, and water have phenomenal reliability relative to the net. The water? Probably 5-6 9's. Gas is close to that. Electricity is the worst because of trees and above ground lines, but it's still 2-4 9's depending on where you live.
The network/cloud systems have to have reliability so high that the potential losses from the downtime are much less expensive than continuing to buy/maintain local computing resources. We are a long way from that, so I see cloud systems as an interesting adjunct, not a replacement, and that duality will continue for the forseeable future.

The Fire and the iPad are now two black holes orbiting around the $350 mark. If a manufacturer releases a product over $350 the customer will be pulled towards the iPad. A product below $350 and the customer will gravitate towards the Fire.

If you ask me, the Kindle (mis)Fire is overpriced at $199.
Also, since it is available in the US, it doesnt have a hope of keeping the iPad at bay.
Apple will also be set to launch an updated iPad next year, and will probably offer the iPad 2 at cheaper prices. The Kindle Fire might sell well, but it wont redefine the market and there will be little change next year.

@chuck - That's a pretty good read. That guy is definitely ahead of his time! Hopefully someone can "dumb this down" so everyday users can be as productive from a tablet. I'm still not big on the cloud thing though. His work is now dependent on ISP connectivity and the near infant cloud. There is still a lot that could go wrong - and I am surprised that he didn't have a hiccup in that area in the month that he wrote about.

I think that this device will sell pretty well. Like Paul states above, it is not a direct competitor for the iPad, though. It is, however, a direct competitor of the Nook Color and has already forced them to make improvements on that device. Amazon is a great retailer - and this device will help them become even more of one.

"It is not an impulse buy nor is it something that will replace a desktop/laptop computer...yet. "
I agree, but there's an interesting perspective on this from a developer who switched from a Macbook Pro to an iPad and a "Linode", which I had never heard of. Basically, he offloads his "computer" needs into the cloud and uses the more lightweight iPad to talk to the cloud.
He's a pioneer, and what he does won't work for everyone, but it's an interesting read....
http://yieldthought.com/post/12239282034/swapped-my-macbook-for-an-ipad

chuckb84
It's all good while it works. And you're right, its dammned impressive. But it relies on an ageing infrastructure and a great deal of trust in the clould suppliers. I wonder what their disaster recovery plans are. A company goes bust, a cable gets ripped by by a trawler or a bulldozer, your local telephone exchange gets flooded (happened to me a month ago), a pissed off employee wipes a server, hackers get in. As tayme says, too much uncertaincy. Call me old fashioned, but as much I as would like to trust the clould, there are just too many weaks points to allow me to give it control of my data exclusively.

@Tayme:
While the Fire isn't a direct competitor, it will eat into iPad sales, much in the same way that the iPad eats into netbook or (to a much lesser extent) PC/Mac sales. It may fill the need for a person better than the (more expensive) iPad.
For example, I bought my wife an iPad last year so she'd have something to surf with while hanging out on the couch. And that's her only need - a browser and email support. The iPad was a very expensive (and great husband-point earner) of filling this desire. If the Fire had been out, I'd have gone that direction instead.

Let's see...I have six computers on my homeserver network, have two Honeycomb tablets, a new droid razer, a 2nd generation kindle, and the new kindle fire. I have worked in the Apple world, but don't currently own any.
Unlike some of the comments here, I would like to say that I think the Kindle Fire will make a ton of money for Amazon and will, as the commercial used to say, "earn it". It works very well as a reader. The lending library function (amazon prime required) is a killer app. Read a borrowed book a month and you've covered the cost of the unit very quickly. Browsing the Amazon store is fast and easy. Reading sample sections of books will sell a lot of them. The movie function works well, both netflix and amazon movies (again, Prime makes them free). Yeah, the screen is smaller than my other tablets, but heck, people watch movies on phones. Of course, once you have Prime, you're going to go to Amazon first for online order since you have two shipping free. Oh, yeah, and Audible works well, too (another Amazon product) Great concept and an absolutely acceptable implementation for what it is. Will it replace my 4g tablet, no? any of my computers, no. So what!

It should be called the Kindle (mis)Fire after these reviews:
http://www.wired.com/reviews/2011/11/kindle-fire/all/1
http://www.pcworld.com/article/243857/amazon_kindle_fire_misfires.html
http://www.nytimes.com/2011/11/14/technology/personaltech/the-fire-aside-amazons-lower-priced-kindles-also-shine.html?_r=1
http://www.engadget.com/2011/11/14/amazon-kindle-fire-review/
http://online.wsj.com/article/SB10001424052970204190504577040110511886588.html
http://www.theverge.com/2011/11/14/2560084/kindle-fire-review
The reviews above get more positive as you go down the list. There seems to be one common theme though. Even though the reviews list dozens of disadvantages and flaws of the Kindle (mis)Fire, they all seem to be forgiven because of the $199 price tag.
For example, Walt Mossberg concludes that Amazons Kindle Fire is an attractive alternative for many people who might otherwise have bought an iPad
Yet throughout the review he makes the following points:
1. Is much less capable and versatile than the entry-level iPad
2. Has a fraction of the apps
3. Has a smaller screen; less than half the surface area of the iPad
4. Lacks basic built-in apps such as a calendar, notepad or maps
5. Has plain and clunky hardware with zero style
6. Has inconveniently located or no essential physical buttons or controls (home, volume)
7. Has no cameras or microphone
8. Has no GPS
9. Has no Bluetooth for headsets or wireless speakers
10. Has no included earbuds
11. Has no built-in cellular connectivity
12. Has no included cable for connecting to a computer
13. Has limited memory for storing content such as movies
14. Has a frustrating interface
15. Has a problem with its touch calibration
16. Is difficult to stop scrolling on the desired item
17. Requires more pressure than it should to open selections
18. Browses noticeably slower than an iPad
19. Has inferior display of magazines and newspapers compared to iPad
20. Has only 60% of iPad battery life.